Govt distributes digital transaction quota

The ministry of road transport and highways and the department of telecommunications (DoT) will be chasing the highest targets for electronic payments in the government's plan to turn India into a less-cash economy .Surabhi Agarwal&Pratik Bhakta | ET Bureau | July 21, 2017, 08:03 IST

After the demonetisation exercise was announced in November last year, the government ran an aggressive campaign to cut transactions in cash. While announcing the Budget in February , Finance Minister Arun Jaitley had set a target of 25 billion digital transactions for the current fiscal.

In order to meet this target by end of March 2018, the government has split the number across 35 government ministries and 29 states and seven Union Territories.

According to a top official, mini stries have been chosen depending on their ability to carry out digital transactions through their physical footprint. “For the petroleum ministry, the point of interface will be the petrol pump network; for human resource development it is the educational institutes, and for railways, it will be the stations or the booking counters," said the official.

A lot of awareness has already been created but more needs to be done to educate about the huge cost of cash so that more people turn towards digital payments. “We believe that states and ministries with huge citizen interface can play a big role in it," the official said. Efforts are on to install FASTag lanes across 360 of the 375 toll plazas on national highways to enable digital toll payments."

Already around 5.3 lakh tags have been issued by banks to vehicles, mostly commercial vehicles,“ said AP Hota, MD of the National Payment Corporation of In dia (NPCI), the umbrella organisation for all retail payments in India.

While the ministry of road transport and highways and the department of telecommunications have been given targets upwards of 5 billion, they are followed by the ministries of railways and petroleum and natural gas, which must aim for 2.82 billion and 2.29 billion transactions, respectively . Among states, Maharashtra and Uttar Pradesh have the highest targets (above 3 billion) followed by Tamil Nadu, West Bengal and Gujarat with numbers in the 1.5-2 billion range. The ministry of electronics and IT, which is shepherding the exercise, has also created an online dashboard to monitor the progress real-time and will make the dashboard public soon, the official said.

“Digital payment targets have been given not only to banks but also to various central ministries as well as state governments. Banks and NPCI are working together with all these agencies to be able to take us to the target of 25 billion set by the finance minister for this financial year," said Hota of NPCI.

Hota also said that besides these, the plan is to bring in one payment card for transactions across public transport modes in different parts of the country . It has been started with Kochi Metro and a pilot is on with the Bengaluru bus transit system as well. Banks including Axis Bank, SBI, ICICI Bank and Equitas Small Finance Bank are issuing the radio-frequency identification tags.

Payments companies like MobiKwik and Paytm and payments banks like Fino Payments Bank are working closely with petrol retailers in order to digitise their payments.MobiKwik has already introduced wallet payments across 14,000 petrol pumps in India and is working closely with Hindustan Petroleum (HPCL) and Bharat Petroleum Corporation (BPCL) in this regard.

Fino Payments Bank has also started working on 7,000 of the petrol pumps of BPCL and plans to expand that to 13,000 by the end of the year.“As of now, the major part of the volume of transactions is happening over debit and credit cards at petrol pumps, but we are closely working with BPCL to implement UPI and Aadhaar-based payments for their petrol pumps," said Rishi Gupta, managing director of Fino Payments Bank.